CONGRESS HAS MANY QUESTIONS TO ANSWER

The latest scam revolving around the cunning usurpation of the Rs 1600 crore Herald House in Delhi's Fleet Street by the Congress Party's first family should come as no surprise to those who have closely followed the cunning methods deployed by the family to gain control of large tracts of real estate all over Lutyen's Delhi.

According to Dr.Subramanian Swamy, the tireless crusader, the Congress Party advanced an interest-free loan of Rs 90 crores to The Associated Journals Ltd (TAJL) that owned the now defunct National Herald. This loan was meant to take over the liabilities of TAJL. Later, another company called Young Indian was launched under Section 25 of the Companies Act (meant for not-for-profit organisations) in which Ms.Sonia Gandhi and Mr.Rahul Gandhi together hold 76 per cent of the shares. This company subscribed to a fresh issue of shares of TAJL paying a meagre Rs 50 lakhs, but this was enough to gain control. Through this manoeuvre, the mother-son duo have acquired control of Herald House on Bahadur Shah Zafar Marg, Delhi's Fleet Street, worth Rs 1600 crore. The wily manner in which this property has been appropriated should put Punjabi Bagh real estate agents to shame! These transactions also go to prove that the Nehru-Gandhis have proprietorial control over the Congress Party. That is why, the party "loans" Rs 90 crores to TAJL and thereafter a company in complete control of the family -Young Indian - acquires control of TAJL.

The Congress Party has not denied any of this. Intially, it thought it could get away by showering insults on Dr.Swamy. But, this did not work because on the face of it, it looked like a ploy to usurp valuable piece of real estate. Wiser counsel prevailed sometime later when the party realised that the facts publicised by Dr.Swamy and the inferences he had drawn could not be wished away by merely vilifying Dr.Swamy. They needed to be addressed. Therefore the party's spokesperson issued a statement owning up to the Rs 90 crore loan advanced by the party to the company and thereafter claiming that the party was emotionally attached to National Herald. In this statement, the party claimed that supporting Associated Journals Limited was "a matter of pride" for the party and that by loaning out the money to that company the Congress Party "has done its duty" . The statement also argued that the advancement of the loan to that company was "in furtherance of its object and its political activities". Further, the party said that it was supporting the company "to help initiate a process to bring the newspaper back to health in compliance with the laws of the land". But, this claim of the spokesperson that the party proposed to nurse the newspaper back to health flies in the face of the statement of Rahul Gandhi's office that Young Indian, the new company owned by him and his mother Ms.Sonia Gandhi "has no intention of starting a newspaper".

The party's explanations will not wash, because the end result of all these maneouvres is that a Rs 1600 asset of a defunct newspaper company has been acquired by a company which is almost wholly owned by Sonia and Rahul Gandhi and their only investment while making this acquisition is Rs 50 lakhs.

These dubious transactions raise a host of questions. Prominent among them are whether a political party can engage in commercial activity, like the Congress Party has done in this case? If parties are allowed to indulge in such practices, what will become of our political parties and the democratic system itself? Can political parties be entitled to tax exemptions if they go commercial? Will not our political parties begin to double up as some kind of tax-exempt commercial institutions in which illegal funds can be parked?

There is yet another reason why Dr.Swamy's arguments merit urgent consideration. Over the last decade, there has been a phenomenal growth in the income of political parties. Thanks to the sustained efforts of Association of Democratic Rights (ADR), we now have authentic information on the kind of funds available with political parties in the country. Following an application by ADR, the Central Information Commission directed the Income Tax authorities to furnish details of the income tax returns filed by the national and recognized state political parties since 2004-05. Thereafter, National Election Watch and ADR collated and analysed the data and put their findings in the public domain. As per this data, the total income of six national parties over seven financial years since 2004-05 isaround Rs 4000 crore. Of them, the Congress Party is the richest. It had an income of Rs 222 crores in 2004-05, the year the United Progressive Alliance (UPA) headed by this party, came to power. The party's income jumped to Rs 467 crore in 2009-10, the year this coalition obtained a fresh mandate. In 2010-11, the party's income was Rs 307 crore. Till now, the party's total income since 2004-05 is Rs 2008 crore. It is by far the richest political party in India and its total income since 2004, when it has been in power is more than double that of the other main national party - the Bharatiya Janata Party.

Given the quantum of funds flowing into the coffers of political parties these days and given the fact that political parties are entitled to tax exemptions under the Income Tax Act, it is only natural to expect that these funds are used only for political purposes. Who is to ensure this? The Election Commission has dismissed the petition filed by Dr.Swamy seeking derecognition of the Congress Party. It has said that the conduct of the party (in loaning out funds to a commercial entity) does not violate the Election Symbols (Reservation and Allotment) Order, 1968. By adopting this line, the commission has missed the point. The larger question of income and expenditure of political parties and its impact on the democratic process cannot be wishes away. Since the Election Commission registers and recognizes political parties as per provisions of the Representation of the Peoples Act, 1951, does it have no responsibility in regard to conduct of political parties?